Peter Fine acknowledges with understandable and appropriate pride that Banner Health has come a long way since he first came on board. Fine has been serving as president and CEO since he was hired in November 2000 to bring vision, focused effectiveness and change to the struggling organization. The health system is now a focused, efficient force to be reckoned with, encompassing 7 states and with 36,000 employees and 23 hospitals.
Fine explains that during his tenure, Banner Health has moved away from being merely a healthcare delivery organization and has instead become nationally known for being an ever-improving clinical quality company. In 2001 Fine led Banner in putting together a 20-year vision for the organization. Since then, the vision has been implemented in phases, starting with “getting the hog out of the ditch,” and moving toward building, growing and acquiring.
Banner Health had to learn how to survive in a disruptive environment. Fine notes, “We are now a financially stable organization. We’ve turned it around, proven that we can perform against the best of the best, and have become a clinical outcomes company…. We, as a company, are not afraid of a disruptive environment, because we think it creates opportunity.” Above all, the endgame at Banner Health is clinical outcomes. “Our strategic initiatives in recent years have really been all about clinical outcomes. How do we not only do, but then demonstrate that we have and are improving our clinical outcomes?”
Fine says that as a part of their strategy as a clinical quality company, Banner has aggressively pursued value-based purchasing, which it sees as the wave of the future:
“We see value-based purchasing right at the sweet spot for a clinical quality company. I don’t see that sweet spot for a healthcare delivery company, because with a delivery company it’s all about units of service. For a clinical quality company it’s all about ‘how do you provide a clinical product in an efficient and cost effective manner?’ We have switched our thinking in this company, and there are a lot of things that have caused us to begin to recognize we’re really a clinical quality company, which we believe has positioned us very well for a value-based purchasing environment.”
Fine goes on to describe how Banner has developed very intentional study groups, known as clinical process groups, to closely research and examine clinical best practices. One such group was put together because Banner wasn’t satisfied with the results of its small bowel surgeries. This clinical process group discovered through their research that if you ambulate and feed patients on the first day—contrary to what most doctors were trained to do—you get better results. Banner implemented the findings of the study group, and the clinical outcomes improved dramatically. The length of stay for small bowel surgery dropped 4.5%, complications dropped 10%, mortality rate dropped 57%, and 30-day readmission rate dropped 22%. This significant level of improvement and these impressive statistics were made possible because of Banner Health’s commitment to focusing on and improving clinical outcomes.
In their quest to continually improve clinical outcomes, Banner Health has also stayed on the cutting edge of technological integration, investing in an impressive electronic framework that allows physicians and nurses in all of their facilities to stay connected. According to Fine, as of 2012 there were only about 97 hospitals in the nation that have been validated by HIMSS analytics as ranking at the top of the seven levels of electronic performance, and 21 of those top-level hospitals are in the Banner Health System. Fine says, “We’ve been going through an innovation stage, which is all about using all of our technological capability to improve clinical outcomes.” Through this technology, a doctor at the Washakie Medical Center in Worland, Wyoming could easily monitor his vacationing patient who was admitted to the Banner Good Samaritan Medical Center in Phoenix, Arizona. Not only can physicians monitor their patients remotely, they can also instantly contact nurses, who are equipped with small Vocera phones for hands free wireless communication, to give instructions or ask questions. Additionally, all patients in ICUs in the Banner System are monitored not only by local doctors and nurses, but also remotely by critical care specialists 24×7 through this cutting edge technology. Fine emphasizes, “You have to show that you are affecting either cost of care or you are positively affecting clinical outcomes as an end result of the investment you have made technologically.” This is something Banner does well; technological integration is just one more way they stay on top of clinical outcomes.
Another significant way Banner Health System has changed under Fine’s leadership is its transformation from a holding company to an operating company. Fine says, “I think it’s very difficult to create a successful healthcare system if you run it as a holding company instead of an operating company. As a holding company it’s hard to implement things because every time you try, it’s ‘Mother May I?’ The operating model allows you to quickly make important decisions and implement them in a timely manner.” Fine attributes Banner’s quick advancements since 2000 to this model of being an operating company. He goes on to explain what he believes are key aspects of becoming a successful healthcare organization:
“I think, as a key principle, you have to be technologically advanced, and you have to have the ability to move quickly. Therefore I think an operating model is key in the future world, and that holding company models are going to be very difficult to manage because it’s hard to implement change—you can’t move quickly. I think that you also have to have a healthcare system that has the ability to take advantage of disruptive environments. So, they have to have financial stability and financial wherewithal, and they have to have a governance model that is not constituency based, but is based on the future of the present organization. Understanding the difference between operations and governance is a key critical success factor.”
Another important aspect to which Fine points as an essential part of Banner’s successful transformation was their decision to “burn the boats.” He explains, “Our board burned the boats and there was no retreating… they said, ‘we are now a board of a new organization, we are not representative of our past alliances.’” Fine says, “We’re convinced that if you don’t burn the boats and you leave a trap-door—a way of retreat—it will be exercised. And the board said, ‘we can’t do that.’” Once the board of Banner Health made the decision to be a board that wasn’t constituency based, it became clear that the only route to success was to focus on the success of the new company as opposed to the success of the prior constituencies. Fine says, “To me that was a huge principle and an absolute success factor for coming to and leading this organization.”
When asked why so many other healthcare organizations seemingly haven’t adapted and bought into these key success principles, Fine says, “My conclusion of how people think is, ‘What I’m doing must be right, for if it wasn’t right I wouldn’t be doing it.’ Because who ever wants to look at what they’re doing and say there is something wrong with it?” He describes Banner as an organization that is continually challenging its own status quo:
“We are constantly looking for opportunities to challenge what we do, to find an opportunity to do it differently and better. This is a major difference I think between Banner and other companies, and the reason why we have achieved some of the things we have achieved. We are willing to say, ‘the status quo very well could be done differently.’ And so we self-analyze ourselves… transparency around information is very important to us—not to blame, but to find opportunities to improve.”
One way that the leadership of Banner Health challenges their own status quo is to adopt the perspective of their biggest competitors and ask questions like, “If you were them, how would you take advantage of us?” Through this kind of role-playing and internal dialogue, Banner’s Peter Fine and other leaders gain fresh perspectives and generate new ideas.
There’s no denying that Banner Health and its fearless leader, president and CEO Peter Fine, are making their mark on healthcare in America.